Beware of Foreclosure Scamsby Tim Manni
As in any time of crisis, frauds and con artists prey upon the desperate and vulnerable. The situation is no different during the subprime mortgage crisis. As a record number of Americans face foreclosures, advertisements began appearing offering a saving grace to homeowners behind on their payments.
For anywhere from $1,000 to $2,500 upfront, mortgage-rescue companies offer to renegotiate the terms of your home loan to lower your monthly payments; others offer homeowners the option of deeding their home to the company in order to allow owners time to get back on their feet financially.
Rescue companies are, for the most part, non-profits which homeowners seek out. Scammers sift through public records seeking those in danger of foreclosures, and bombard them with phone calls and official-looking mail.
Eighteen states have enacted laws against foreclosure-rescue scams by preventing the practices that lead to them. The laws include provisions for canceling contracts, and receiving fair value for the home if sold. Certain states like Maryland and Massachusetts have outlawed foreclosure-rescue transactions completely.